Businesses don’t dare to apply strong measures to ask for debts back

Not only commercial banks, but some enterprises have also set up the divisions in charge of collecting debts. Meanwhile, others don’t intend to apply strong measures to collect debts, fearing that if debtors collapse, they would not be able to pay debts.

A director of an agriculture machine import company in Dong Da district in Hanoi has to sell his house in Hai Ba Trung district in Hanoi and move to the small apartment in Xa La urban area. The money from the house sale has been used to pay bank debts.

The businessman said in 2011, he could have been sold the house at 8 billion dong. However, since the real estate price has fallen down, he has to sell the house at five billion dong, just enough to pay 70 percent of the loan.

Businesses heaped up with debts

As for the director, selling house is the only choice. “When you pay a part of the debt, you would have to pay less interests every month,” he explained.

In fact, the director is also a creditor himself. The three partners of his company still have not paid the debt of over 10 billion dong. Having no capital to maintain production, the company has been nearly halting production since mid-2012.

“We still could not claim the money back. I once thought of applying strong measures to collect debts. But I then thought that if the debtors “have problems” in the eyes of their clients, they would lose clients and have no money to pay debts to me,” he said.

Meanwhile, other businessmen don’t have houses to sell to pay bank debts. Director of a farm produce processing company these days has to hide himself to avoid the attack of creditors.

He borrowed 50,000 dollars from a bank to import materials to process domestically for export. However, since the export markets have been narrowed in the global economic crisis, the company could not export products and did not have money to pay bank debts.

The businessman then decided to borrow money in the black market as the last resort, to pay debt to the bank, after receiving the promise from bank that the bank would provide a new loan after the company pays the old debts.

However, surprisingly, the bank stated that it would not disburse for the company any more. Hearing the information, other banks and the creditors in the black market have been tracing the businessman everywhere to claim money back. Meanwhile, the value of the goods left at the company is not enough to pay debts.

Businesses’ debts worth billions of dollars?

Le Xuan Nghia, Deputy Chair of the National Finance Supervision Council, has estimated that the businesses’ debts may have reached 15 percent of the total banking system’s bad debts.

An estimate by international experts said the total bad debts in Vietnam are worth 7 billion dollars, or 5 percent of GDP. As such, the businesses’ debts (the debts among businesses) is about 1.05 billion dollars.

Not only commercial banks, but enterprises have also set up the divisions in charge of collecting debts. The divisions have been told to apply all possible measures to get money back.

A food company, specializing in providing input materials to some restaurants, has sent its staff to the restaurants. The company’s workers have been present at the restaurants from the morning to evening and collecting all the money paid by the clients at the restaurants.
SGTT

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